The Nairobi Securities Exchange-listed firm spent Sh245.1 million last year to raise its stake in Civicon to a new high of 83.5 per cent compared to the previous 78 per cent.The Nairobi Securities Exchange-listed firm spent Sh245.1 million last year to raise its stake in Civicon to a new high of 83.5 per cent compared to the previous 78 per cent.
The company said it acquired Civicon to gain exposure to increased investments in infrastructure in the region where governments and private firms are spending billions of shillings on various projects including mining, logistics, roads and power generation.
Revenues at the engineering unit hit Sh3.7 billion last year, accounting for 45.8 per cent of the Sh8.1 billion total turnover in the period.
Investment firm TransCentury #ticker:TCL has acquired an additional 5.5 per cent stake in its subsidiary Civicon, signalling its bullish stance in the prospects of the engineering firm, which is its main cash cow.
The Nairobi Securities Exchange-listed firm spent Sh245.1 million last year to raise its stake in Civicon to a new high of 83.5 per cent compared to the previous 78 per cent.
The transaction, disclosed in TransCentury’s latest annual report, now values Civicon at Sh4.4 billion.
The investment firm first acquired a 62 per cent equity in the engineering firm in 2011 for an undisclosed amount.
It bought an extra 16 per cent stake in the company in 2015 for Sh712 million ahead of the latest buyout of minority interests.
“In 2016, the group acquired an additional 5.5 per cent interest in Civicon Africa Group Limited for Sh245 million, increasing its ownership from 78 per cent to 83.5 per cent,” TransCentury said in the report.
The company said it acquired Civicon to gain exposure to increased investments in infrastructure in the region where governments and private firms are spending billions of shillings on various projects including mining, logistics, roads and power generation.
Civicon is the company’s flagship subsidiary in the engineering division which won major contracts last year, a move that is expected to boost the company’s earnings over the medium term.
“The order book currently stands in excess of Sh12 billion whose execution is projected to be over the next 24 months,” the company said of its engineering unit’s new contracts.
TransCentury says Civicon has undertaken works from several government and corporate clients including Chevron, Kenya Breweries, Shell and the Government of South Sudan.
Its projects include exploration, logistics and building of bridges, fuel depots and electricity transmission lines.
Engineering is the second most important business division at TransCentury after power which is represented by East African Cables #ticker:CABL .
Revenues at the engineering unit hit Sh3.7 billion last year, accounting for 45.8 per cent of the Sh8.1 billion total turnover in the period.
The division, however, made the largest net loss of Sh1.8 billion in what contributed to the parent firm’s consolidated negative earnings of Sh863.8 million.
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